State Sen. Kruger Accused of Taking Bribes

WNBC's Jonathan Dienst Reports

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Sen. Carl Kruger, D-Brooklyn, in the Senate Chamber at the Capitol in Albany, N.Y., on Monday, June 21, 2010. (AP Photo/Mike Groll)

Updated at 1:05 AM EDT on Wednesday, Mar 30, 2011

State Sen. Carl Kruger was charged Thursday with federal corruption, conspiracy and money-laundering for allegedly taking at least $1 million in bribes from associates and lobbyists in exchange for favors since 2006.

Assemblyman William Boyland Jr. and several associates are also facing federal charges in the latest takedown of state elected officials.

Kruger Accused of Taking Bribes

Jonathan Dienst reports. (Published Thursday, Mar 10, 2011)

U.S. Attorney Preet Bharara said at a news conference that no matter how often the alarm goes off, Albany hits the "snooze button."

"We are still up to our eyeballs with corruption," he said.

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Kruger and Boyland surrendered Thursday morning and appeared in Manhattan federal court. A magistrate judge released them without bail.

The associates named in court papers include influential lobbyist Richard Lipsky.

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Court papers accuse Kruger of taking bribes from a number of individuals, including Lipsky, in exchange for "official acts in favor of which Lipsky had been paid to lobby."

Kruger took steps in his job as state senator to ensure millions of dollars in state money went to development projects of those paying bribes, officials said.

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The suspects set up a shell company called "Olympian" to try to hide the corrupt payments, investigators said. Kruger and Michael Turano, described as an intimate family friend, allegedly used the $1 million dollars to help pay the mortgage on a large home in Marine Park as well as a Bentley automobile.

A separate bribery conspiracy involved no-show consulting jobs where hundreds of thousands of dollars in cash was funneled to Boyland and Kruger, prosecutors said.

In all, eight people were charged, including a real estate developer, two hospital CEOs and a health care consultant.

The investigation included intercepted cell phone calls between Kruger, Lipsky and another former assemblyman, Anthony Semenerio, who was arrested in 2008 in connection with a hospital consulting scam.

He was sentenced to six years in prison in February 2010, but died in prison.

Boyland is accused of similar crimes as Semenerio, for receiving "sham consulting payments." He allegedly took a no-show job with a company called MediSys and in exchange, used his elected office to help set up meetings for the medical firm with the state health commissioner. The CEO of MediSys David Rosen was also arrested.

Kruger's lawyer Ben Brafman said his client, a Brooklyn Democrat who has served in the state senate since 1994, is "saddened because he's one of the most dedicated public servants."

"This is obviously a difficult day for all of us," Brafman added.

Calls and emails to Boyland's offices and a home listing were not returned. Gerald Lefcourt, attorney for Lipsky, did not comment.

New York FBI Director Janice Fedarcyk called the corruption "eye-popping."

In a separate investigation, a fundraiser for Kruger recently made headlines with a guilty plea in feder al court in Brooklyn.

On March 1, Kruger fundraiser Michael Levitis, a restaurateur, admitted guilt to one count of making a false statement to federal authorities.

Boyland is in his fourth term representing the assembly's 55th district in Brooklyn.

Gov. Cuomo said in a statement that the arrests "spotlight the failings" of the state government and highlight the need for ethics reform, which was one of his campaign promises.

"New Yorkers deserve a clean and transparent government comprised of officials who work for the people, not for the special interests and certainly not for their own corrupt self-interests," he said.

The charges come amid a number of corruption cases involving Albany politicians. One-time Senate Majority leader Joe Bruno and Queens Assemblyman Brian McLaughlin are among the politicians who have been arrested and charged by the feds in recent years.

Kruger was considered one of the more powerful legislative leaders when Democrats controlled the senate.

"When prosecutors charge politicians, it should not feel like a scene from Groundhog Day," Bharara said. "And yet it does."